| Summary: | The world is on the brink of the fourth industrial revolution. The scope and depth of changes comprised by this revolution call for an analysis of its financing model, covering financing of both complex transformation of manufacturing processes in so-called smart factories and the development of technological innovations necessary to build and run such factories. The present article analyzes relative advantages of the banking sector and capital markets as sources of finance for the fourth industrial revolution. It is found that capital markets have a distinct advantage over the banking sector in this context; nevertheless, they will have to face significant challenges.
JEL: G10, O12, O14, O16, O33
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